Home Contributed Southern Investors Are Making Their Move On Post-Harvey Real Estate
Southern Investors Are Making Their Move On Post-Harvey Real Estate
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Southern Investors Are Making Their Move On Post-Harvey Real Estate

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Real estate investors are swooping in on Southern homes in the aftermath of Hurricane Harvey. Two months after the hurricane blew through Alabama, Louisiana, and Texas, many homeowners in the South unsure what to do with their flood-damaged homes. However, real estate investors are willing to buy these homes for a reduced price.

“I’ve seen plenty of flood houses at this point,” said Corey Boyer, an investor from Cypress, Texas. Boyer has been placing offers on multiple houses throughout the Houston area despite inspecting few of them. “As unfortunate as this situation is, this is one of the best situations for somebody like myself because you see everything.”

Boyer is just one real estate investor buying homes in what the National Public Radio calls a post-Harvey-frenzy. Southern homes that were once on the expensive end are now being sold at low prices due to flood damage and needed repairs.

One house, Boyer says, was selling for $350,000 before the hurricane. Boyer purchased the home for a total of $135,000. Up to $60,000 will be necessary for repairs. Still, Boyer says, the investment is worth it.

Southern cities like Houston and New Orleans have some of the hottest housing markets because of their urban culture and entertainment. Flooding from Hurricane Harvey won’t change Houston’s popularity.

“[But homeowners] don’t have an easy way out,” said Bower. “They’re facing a bad decision or another really tough decision.”

According to the Consumer Federation of America, approximately four out of every five American homes damaged by Harvey weren’t covered by flood insurance. However, even with flood insurance, many Americans are still waiting on coverage while paying their mortgage and utilities for a home they can’t live in.

Where real estate agents may get into trouble is the value of the neighborhoods they’re buying into. Landscaping may add up to 14% of resale value to a home and new, unclogged gutters may keep a remodeled home’s basement from flooding. But a vacant neighborhood can reduce the value of a home significantly.

Many Houston homeowners have been turning away from their homes and leaving the area for dryer land. This is why investors such as Eddie Gant, the owner of Advantage House Buyers, say the housing turnover in Houston may last a few years.

“We’re still in the what I call the embryo stage of what’s going on,” said Gant.

Investors will profit only when there’s minimal flood damage in the area and the neighborhoods are active again. A community is important to many homeowners. At some point in their lives, up to 63% of adults have moved to a new community.

It’s also through community involvement that many potential homeowners find their dream homes. Facebook hosts approximately 1.97 billion active users every month. Some of these users interact through online groups such as house hunting networks to get reviews and real world opinions on the best neighborhoods to live in. Disappearing neighborhoods in the midst of a real estate frenzy may not be the best for investors.

However, it’s when the next wave of home sellers hit the market, Gant says, that the market may become a little worse for wear. Many Houston homes were not only affected by floodwaters but were outright underwater.

“That’s where it’s going to get a little hairy around here,” said Gant. “And maybe a little ugly.”